Anyone keenly following the escalating rift between the Chartered Insurance Institute (CII) and subsidiary Personal Finance Society (PFS) will know that a “disgusted” Caroline Stuart has resigned as PFS president while rallying members to act and protect the PFS. CII Group chair Helen Phillips has now issued a response, insisting that her camp’s actions towards the PFS board are justified.
On Thursday, as reported by Insurance Business, Stuart announced her decision to immediately stand down amid what she described as “the most challenging of circumstances” for the member directors of the PFS board. She had been a member director since 2018 and was elected as president last September.
“I am disgusted with the way the CII has behaved towards the PFS, the PFS members, and the PFS board,” declared Stuart in her resignation pronouncement. “I believe they have attempted to gain access to the PFS reserves through bullying and intimidation of the PFS board, and when the member directors stood firm and these tactics failed, through the only option remaining to them – in my opinion, a cynical, disingenuous, and autocratic takeover of the PFS board using unfounded and spurious allegations as the reason.”
The PFS board previously consisted of five member directors, including Stuart, and two institute directors from the CII. This changed when the latter installed three more institute directors last December 21 in a move that was heavily criticised by the PFS membership.
Prior to Stuart’s resignation, member directors and co-opted advisers of the PFS board released a statement expressing their disappointment with what they called “false” comments by the CII about supposed governance failures and other failings at the subsidiary body.
According to the CII, the issues include the exclusion of institute-appointed directors from PFS board meetings and decision-making processes; the reappointment of expired board members by co-option rather than rotating board membership; and pursuing actions without full board authority.
Meanwhile, Stuart stated: “My fellow member directors and I completely and strongly refute all allegations made by the CII in respect of governance failings, and despite numerous requests to provide evidence of these governance failings, to date, none has been forthcoming.
“Why is this? I believe it is because there is none, and these allegations are, in my opinion, blatantly the only avenue remaining for the CII to access the funds I believe they need to prevent the organisation completely failing.”
As per the claim on the “Act now to stop the CII coup” page, “it’s all about the money,” referring to millions of pounds in PFS membership funds without which, asserted the PFS, its parent would most likely be insolvent.
Following Stuart’s resignation, the CII reacted through a statement from chair Helen Phillips.
“It is with sadness that we have heard of Caroline Stuart’s decision to resign as president of the PFS board,” said Phillips. “Undoubtedly, Ms Stuart’s role has been particularly challenging over the last few weeks, and I wish her a swift recovery.
“Sadly, we must reiterate that the PFS board governance failures – which are recorded on our website – are not, as claimed, baseless or without foundation, and suggestions that the CII Group board has appointed further institute directors for any other reason is deeply misleading.”
Phillips also reiterated that the controversial board appointments before Christmas were neither wanted nor pursued by the CII.
“After significant governance failings were repeatedly raised with the PFS, the CII Group board was sadly left with no choice but to address these failings and take this action after its December board meeting,” she declared. “Not only was this in the best interests of all PFS and CII members, it is also consistent with the general duties conferred in law on all company directors, as well as in the PFS Articles of Association.”
The chair went on to say: “The CII Group board remains deeply committed to its PFS members and – for the avoidance of doubt – there is no plan whatsoever to deregister the PFS. The CII Group board sees no merit in such a move and wants to see the PFS flourish as a professional membership body.”
Meanwhile the member directors and co-opted advisers of the PFS board are calling for an extraordinary general meeting in the next two weeks.
What are your thoughts on the latest developments in this ongoing rift? Share in the comments below.
